Why the U.S. Has Gone Broke

May 15, 2008
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Going into 2008, the United States finds itself in the position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. The government no longer even attempts to reduce the ruinous expense of maintaining huge standing armies.

Instead, the Bush administration has put off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through manipulative financial schemes, but the time of reckoning is fast approaching.

There are three aspects to the U.S. debt crisis.

First, the U.S. is spending insane amounts of money on "defense" projects that bear no relation to the national security of the U.S. At the same time, the income tax burdens on the richest segment of the population are at strikingly low levels.

Second, there is a mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.

Third, this devotion to militarism despite limited resources results in a failure to invest in social infrastructure and other requirements for the long-term health of the U.S. These are what economists call opportunity costs, things not done because the money was spent on something else. The public education system has deteriorated alarmingly and health care is not available to all citizens. Most important, the U.S. has lost its competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing.

In the video above, Ron Paul discusses some of the dangers of current U.S. foreign policies.

Interventionism -- The policy or doctrine of intervening, esp. government interference in the affairs of another state or in domestic economic affairs. Characterized by the use or threat of force or coercion to alter a political or cultural situation nominally outside the intervenor's moral or political jurisdiction.

The United States is closing military bases in the U.S. while building them overseas. We ignore our own borders, while policing the borders of other nations.

The U.S. government borrows from other countries, and when no one is willing to hand us a dollar for our song and dance, the Federal Reserve simply prints more money.

When Presidential candidate Ron Paul says, “We’ll either wake up or go broke,” he’s not blowing smoke or crying wolf to garner votes. And, he’s also correct when stating that personal liberties are undermined by the current policy of intervention.

That’s you and me, folks. Our liberties, not the liberties of terrorists, whether real or imagined.

Loss of Freedom – For Sale to the Highest Bidder

I was shocked to discover that the planned defense-related spending for the fiscal year of 2008 now stands at over $1 trillion.

$1 TRILLION!

It’s even more viscerally obscene when you see it in a chart, like this one provided by Chalmers Johnson, the author of the article above.

The military budget of the U.S. exceeds the combined military budgets of NINE other major nations!

And, to top it all off, the supplementary budget to pay for the current wars in Iraq and Afghanistan -- which is not part of this $1 trillion defense budget -- is itself larger than the combined military budgets of Russia and China.

Got a Problem? Spend More Money – It’ll Go Away

The more I think about it, the more this is starting to remind me of the U.S. health care system, where expensive drugs are thrown willy-nilly at symptoms; the treatments and “cures” causing more harm to the patient in the long run while making the pharmaceutical companies rich beyond anyone’s wildest dreams.

According to the Congressional Reference Service (CRS) report to Congress titled, The Cost of Iraq, Afghanistan, and Other Global War on Terror Since 9/11, dated February 8, 2008, the U.S. war-on-terror-machine has spent $700 billion -- purportedly making the world a safer place -- since 2001. However, as Mr. Johnson states in his article, this number is by no means an all-inclusive account of the real dollar amounts spent.

But even at that, are we really to believe that despite spending $700 billion we’ve been unable to capture the man allegedly capable of launching coordinated world-wide terror attacks from a cave?

And are we really supposed to believe that if we just spend $1 trillion more in the next foreseeable future, we’ll be able to finally get the upper hand; we’ll be able to stamp out the disease of terror that plagues us?

Seriously?

Clearly, eradicating either disease or “terror” by throwing money at it doesn’t work. The U.S. health care spending, which topped out at $2.1 trillion in 2006, should be ample proof of that.

And yet, it’s the same principle at work, both within the conventional health care paradigm and the interventionist foreign relations agenda: Take a pill; drop a bomb -- you’ll feel better and you’ll be safer for it. Keep taking those foreign chemicals for the rest of your life; set up a permanent presence in foreign lands and tell them how to run things – why are you complaining? We’re fixing you!

Folks, both of these systems are set up in such a way that nothing really gets better, nothing is really resolved; the “disease” is never conquered, only complicated.

Why?

Because otherwise the well would dry up, now wouldn’t it?

When Did Gluttony Cease to Be a Deadly Sin?

The problem is, the well is drying up anyway. Not because people have discovered the truth about these schemes and decided to reject them, but because they’ve gotten too greedy too fast, and both systems have become unsustainable by their sheer gluttony.

America has, under the solid misguidance of the Bush administration, managed a near impossible feat: increasing the national debt by 45 percent since 2001, to a sobering $9 trillion.

And when I suggest that a gluttonous “too much, too fast” attitude is at work, I’m basing it in part on this fact: from the moment of the U.S. constitutional birth in 1789, the debt accumulated by the federal government did not hit $1 trillion until 1981. It took 183 years to incur the first trillion dollars. It only took 20 years to grow that debt to $5.7 trillion, and a mere seven years to reach $9 trillion.

I’d call that fiscal suicide by exponential gluttony.

Perhaps if we’d spent a couple of bucks on education, we’d have at least a handful of elected officials who could do the math, and a couple of others to supply the critical thinking. I don’t know. Just a thought.

Maybe someone should have considered the fact that being a ‘world super power’ is in large part dependent on having proper leverage. As it stands today, the U.S. can boast about being the 163rd country on the list of nations’ accounts of trade surplus’ and deficits.

That puts the U.S. dead LAST of all nations on the planet, with the highest trade deficit in the world.

If international banking and trade were a casino, the U.S. would be that guy who sucked down a few too many “free” drinks, gambled a little too long, invited a few too many inappropriate ladies, and lost big; now sweating bullets, frantically trying to figure out how to avoid getting his bones crushed and fingernails ripped out by the professionals who lent him the money for his spree.

Maybe he’ll pop a pill and buy a bazooka, thinking that’ll take care of the problem for the time being.